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Four significant 2016 international trade developments that merit attention

Awareness, or lack thereof, of changes in international trade developments can mean the difference between success or failure during any given year. 2016 will be no different.

Four major 2016 international trade developments that businesses that import and/or export goods should take note, and advantage, are comprised of the following:

IMMEX – The IMMEX, or maquiladora program, makes provision for the importation of material inputs into Mexico to enable goods be manufactured or repaired, and, then, re-exported. Companies that have gone through the IMMEX program certification process, and have complied with its provisions, have earned the ability to temporarily import the raw materials and other inputs required to manufacture or repair items, while receiving an exemption from the sixteen percent VAT tax that Mexico normally levies on items imported into its national territory. Today there are more than 6000 companies participating in the IMMEX program. Sources within Mexico’s Economics Secretariat advise that there will be modifications made to the program during the upcoming year. Changes to the program will be published in the near future.

Automated Commercial Environment (ACE) – Another of the significant 2016 international trade developments to be rolled out in the coming months is the implementation of ACE, or the Automated Commercial Environment. ACE is a trade modernization initiative that proposes to facilitate and streamline information exchange between US Customs and Border Protection and forty-seven Partner Government Agencies, or PGAs. Starting in February of 2016 importers and exporters will be expected to file information related to their international trade transactions through the use of ACE defined processes and requirements.

Trans Pacific Partnership – The TPP was seven years in negotiation, and indisputably represents the largest trade deal in history. It is sure to be impactful as one of the 2016 international trade developments that shapes world commerce. The economies of the twelve nations that are signatories to the agreement combine to account for forty percent of global GDP, and move one-third of the world’s trade. Over the course of 2016, following TPP countries must seek ratification of the Trans Pacific Partnership trade treaty in their respective legislative bodies:

Australia

Brunei

Canada

Chile

Japan

Malaysia

Mexico

New Zealand

Peru

Singapore

Vietnam

United States of America

Information Technology Agreement – The first Information Technology Agreement, or ITA, was concluded in December of 1996 at a Word Trade Organization conference that was held in Singapore. Currently there are seventy-four participants to the agreement that pledge to eventually eliminate duties on a wide range of IT products that are traded internationally. The seventy-four current participants in the Information Technology Agreement represent ninety-seven percent of the market for global IT products. Presently under consideration are measures that would eliminate tariffs on products with an estimated value of US $1.3 trillion in yearly global trade. Current WTO members that are not signatories to the agreement are Argentina, Brazil, Chile, Mexico, Tunisia and South Africa.

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.

“The Tecma Group of Companies' services allow me to concentrate on making and selling wood pallets. I have Tecma handle all administrative functions, Mexican Customs, human resources, all permitting, as well as the legal aspects of manufacturing in Mexico. It’s a very good, complementary relationship. They provide me with a project manager, which means I don’t have to deal with a lot of individuals. I deal with one individual, who then deals with experts in all relevant disciplines on my behalf.”

“When we purchased the Dashmat product line, which is the product that we are manufacturing in Ciudad Juarez, we were able to establish a Mexico manufacturing plant with Tecma very quickly. They got us up and running very smoothly under their Mexico Shelter Manufacturing Partnership (MSMP). We like Tecma because it is a stable company that has been around for many years, and looks to be around for many more. Tecma appears to care about our Mexico business' success is very responsive to our needs.”

“Since we started, we have been able to maintain a competitive advantage over many of our competitors that have moved their manufacturing to China by reducing lead times to 4 weeks less than most of our competitors. This has given us the ability to compete on pricing against many of our competitors that have gone to China. We found that in our Juarez staff in Mexico we found a highly-trained workforce with strong background, and the capability to do mannequin manufacturing in Mexico.”

“More than a decade ago, Portage Electric Products Incorporated was faced with the reality that we were going to have to consider manufacturing in another country in order to maintain our competitiveness in the global marketplace. We chose Mexico, as we could be here literally within hours, should the need arise. We chose the Tecma Mexico Shelter Manufacturing Partnership (MSMP) because it provided virtually everything we needed to begin with and support an ongoing Mexico manufacturing operation.”

This quarterly publication will be populated with content that is useful and relevant to readers that are contemplating Mexico investments, have operations already within the Republic, as well as to other individuals that have an interest in Mexico and its manufacturing sector.